The twin American Jobs Plan and American Families Plan are a $4 trillion proposal that would pour reams of cash into a number of sectors, while increasing taxes on the wealthy and corporations.
Proponents say the bills will create jobs while improving critical infrastructure — both traditional and new definitions — while paying for itself. Critics say the spending is untenable and will result in fewer jobs.
During a conversation with the Nonpareil on Wednesday at Legends Cafe in Council Bluffs, Rep. Cindy Axne said the bills would, “create economic opportunity for Iowa and the rest of the country in multiple new ways.”
The infrastructure bill would, according to reporting from the Associated Press, use $115 billion to modernize the bridges, highways and roads that are in the worst shape. The White House outline estimated 20,000 miles (32,187 kilometers) of roadways would be repaired, while economically significant bridges and 10,000 smaller bridges would get fixed.
It would also include:
- $85 billion for public transit, doubling the federal government’s commitment in an effort to shorten the repair backlog and expand service.
- $80 billion to modernize Amtrak’s heavily trafficked Northeast Corridor line, address its repair backlog and improve freight rail.
- $174 billion to build 500,000 electric vehicle charging stations, electrify 20% of school buses and electrify the federal fleet, including U.S. Postal Service vehicles.
- $25 billion to upgrade air travel and airports and $17 billion for waterways and coastal ports.
- $20 billion to redress communities whose neighborhoods — typically nonwhite — were divided by highway projects.
- $50 billion to improve infrastructure resilience in the aftermath of natural disasters.
- $111 billion to replace lead water pipes and upgrade sewer systems.
- $100 billion to build high-speed broadband that provides 100% coverage for the country.
- $100 billion to upgrade the resilience of the power grid and move to clean electricity, among other power projects.
- $213 billion to produce, preserve and retrofit more than 2 million affordable houses and buildings.
- $100 billion to upgrade and build new schools.
- $18 billion to modernize Veterans Affairs hospitals and clinics, and $10 billion for federal buildings.
- $400 billion to expand long-term care services under Medicaid.
- $180 billion invested in research and development projects.
- $300 billion for manufacturing, including funds for the computer chip sector, improved access to capital and investment in clean energy through federal procurement.
- $100 billion for workforce development.
“This will all create jobs,” said Axne, a Democrat who represents Council Bluffs and much of southwest Iowa in the 3rd District. “We’re not just thinking about today, but about the future. That’s where things like broadband come in, deployed across this country — and every last mile here in Iowa. And not just create connectivity, but help businesses stay afloat. Kids will be able to do homework in their homes. It’ll help us deliver telehealth like we have been doing during COVID. That has not been just a lifesaver, but a best practice in some instances.”
To pay for it, President Joe Biden has proposed raising the corporate tax rate from 21% to 28%, with the White House saying over 15 years, it would cover the cost of the infrastructure program. Among other payment mechanisms, the bill would also impose a 21% global minimum tax, make it harder for businesses to merge with foreign companies to avoid U.S. taxes and increase Internal Revenue Service audits of large corporations.
The president has said the tax increases would not affect anyone making less than $400,000.
Axne said the bill will address traditional infrastructure, like bridges and roads, while also expanding broadband and green energy.
“When (Iowa) got into wind energy, we set up community college training courses for people to work on the turbines, good paying jobs. We need that now when it comes to supporting our broadband, when it comes to supporting programming for the electric grid,” she said. “All of these things are going to create long-term jobs for people.”
The American Families Plan will expand affordable child care and paid family leave, which Axne called part of a new definition of infrastructure.
Asked about lessons from the pandemic, Axne said, “what we’ve also seen is that even in the best of circumstances, no roads down, less traffic, we saw we were missing out on childcare, things like paid family leave, sick days.”
“The person working an hourly wage job that has to come into work even if their children are sick, that’s not a country that we should be in. We should be able to support people in those endeavors,” she said. “Every person who works works full time in this country should be able to make a living wage. We need to move toward a country where we understand that we’re all better off when we’re all better off.
“Whatever we can do to bring people opportunity are what I believe are truly infrastructure. It could be a road, and it could be broadband. It could be a sewer system and it could be a childcare center. Every single one of those things enhances our economy, creates safety for our community and puts money in people’s pockets.
“We have to learn that infrastructure adapts to the needs of society. Infrastructure isn’t one solid piece of cement that never changes. It has to be flexible and support the kind of work we do today.”
Discussing the bills’ price tags, Axne said they will pay for themselves, “by making sure the wealthiest Americans and corporations pay their fair share,” noting the disparity in what the working and middle class when compared to the ultra rich and corporations who use a variety of loopholes to lessen their tax burden.
“To me this is so common sense,” she said. “Those are the companies that benefit most from infra, they should pay for it.”
Regarding an increase in IRS audits of corporations, Axne noted the amount of uncollected taxes because of the underfunding of the IRS. Congressional Budget Office data shows IRS appropriations fell by 20% from 2010 to 2018. A 2011-2013 study of compliance by the IRS showed around $380 billion in uncollected taxes. A study by the IRS released this year showed, “random audits underestimate tax evasion at the top of the income distribution. Specifically, random audits do not capture most tax evasion through offshore accounts and pass-through businesses, both of which are quantitatively important at the top.”
“This business has a better chance of being audited than some business with offshore accounts,” Axne said at the diner. “We need to get the IRS back up and running. We’re leaving money (from the wealthy and corporations) on the table.”
Republicans in Congress and many in the business community have come out against the bills, in large part because of the funding plan.
The AP reported U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley said in a statement that “we applaud the Biden administration for making infrastructure a top priority. However, we believe the proposal is dangerously misguided when it comes to how to pay for infrastructure.”
The Business Roundtable, a group of CEOs, would rather have infrastructure funded with user fees such as tolls.
Sen. Chuck Grassley, an Iowa Republican, has criticized the plan for not doing enough for rural areas.
Republicans have said the plan will result in job losses. CNN reported that the Tax Foundation found that Biden’s proposed corporate tax increase alone will eliminate 159,000 jobs in 10-30 years and reduce wages by 0.7%.
As part of the same report, CNN noted that Nela Richardson, chief economist at ADP, said, “In the near term I do think it means an increase in jobs, especially in construction.” S&P Global estimated that in the short term, the plan could create 2.3 million jobs, but that as infrastructure projects are completed these jobs would taper off and the net jobs added from the proposal would be 713,000 by 2029.
And, some Republicans have criticized the expanded definition of infrastructure.
“This is today’s infrastructure, it needs to get done,” Axne said. “I hope we can move past this narrative and look at what outcomes we can get for the country.”
Axne continued, noting that as the bills makes their way through Congress, “It’s going to be a struggle. Because right now we don’t have the same understanding.”